Question
In 2013, the Westgate Construction Company entered into a contract to construct a road for Santa Clara County for $10,000,000. The road was completed in
In 2013, the Westgate Construction Company entered into a contract to construct a road for Santa Clara County for $10,000,000. The road was completed in 2015. Information related to the contract is as follows:
2013 2014 2015 Cost incurred during the year $ 2,511,000 $ 3,645,000 $ 2,138,400 Estimated costs to complete as of year-end 5,589,000 1,944,000 0 Billings during the year 2,100,000 4,056,000 3,844,000 Cash collections during the year 1,890,000 3,700,000 4,410,000
Westgate uses the percentage-of-completion method of accounting for long-term construction contracts.
Required:
1.
Calculate the amount of gross profit (loss) to be recognized in each of the three years
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